GBPUSD: Struggles To Recover Higher

Pressure is now building up slowly on the upside after the pair halted its corrective weakness at 1.6038 on Friday. However, a convincing violation of its declining trendlinepresently at 1.6213 and the 1.6272 level, its Feb 03'2011 high will have to occur for GBP to resume its strength towards its Nov'2010 high at 1.6298. Above this level will resume its broader uptrend towards the 1.6455 level with a clearance of that level calling for further strength towards the 1.6877 level, its Nov'2009 high. On the downside, a break and hold below the 1.6038 level will resume its declines towards the 1.5819 level, its Jan 19'2011 low followed by the 1.5749 level and then the 1.5660 level, its Dec'2010 low. A cap is likely to occur there and turn the pair back up if seen.